With the Federal Budget released in October 2022, the rising cost of living is again in the headlines. Cost of living, power prices, interest rates, and unemployment are (or will be) going up - and WA households are feeling the pinch. Eastern states are bracing for increases in energy and gas by 56% and 44% respectfully, and inflation has been pinpointed as one of the other pain points. We’re here to shed some light on the issue and help make sense of what we’re all facing in 2022 and beyond.
What does the 2022 federal budget indicate about rising costs?
As mentioned above, eastern states are anticipating increases in power costs by 55% and in gas by 46% over the next 18 months. With inflation also rising at the steepest rate in 32 years – 7.3% for the September quarter – Aussies who have been feeling the squeeze are set to be truly challenged.
What’s more, interest rates have risen again, taking the cash rate to 2.85 per cent. This upward trend is set to continue, further hitting those households that have mortgages. Unemployment may also be going up, according to the budget.
While WA is shielded from the significant power price hikes for the moment, it’s a situation that many fear won’t last. Synergy (and Horizon) is expected to again increase prices next year (after this year’s 2.5% increase), and compounded with the wide range of other increasing costs, WA residents are certainly not insulated.
What do these increases mean for me?
Put simply, the federal budget indicates the next 12 months are going to be bumpy for many households. There’s less confidence around employment, significant increases in energy prices, inflation and no relief in sight for wages. In fact, real wages aren’t expected to increase until 2024.
The good news is that the government has specifically highlighted the financial impacts of climate change (such as disaster recovery, infrastructure costs, responding to Australia’s health needs in extreme heat events etc). As we know, what gets measured gets improved. Plus the tax increases will primarily be used for reducing the budget deficit.
While energy price increases in WA specifically look reasonably small this year, they will almost certainly increase again next year. So now is a very good time to be reviewing your energy usage and moderating for increasing prices.
What can I do about energy price increases?
We know by now that energy prices are on the rise. World affairs make it likely that prices will continue to increase. In fact, the average A1 tariff paid by residential Synergy customers increased by 34% over the past 10 years (from 22.34c in 2011/12 to 30.06c in 2022). So, what can we do about it?
While it may seem trivial, we can adjust our everyday behaviours to reduce our demand for energy and noticeably impact our energy costs. During spring, for example, we can focus on keeping our homes comfortable by preventing draughts, covering windows, maximising sunlight during the day and putting on warm clothes when required before we turn to the A/C.
There are many other tactics, such as using the cold cycle on our washing machines, keeping air conditioners set to 20 degrees for heating and 24 degrees for cooling, turning off lights and appliances when they are not needed and installing a water-efficient shower head which cuts down on water heating requirements.
When energy prices (and many other costs) are on the rise, every little bit adds up.
But how can I future-proof my energy costs?
With no relief in sight for rising energy costs, and a reduced reliability of coal, there’s no doubt that the demand for renewable energy will continue to increase. By taking the power back into their own hands, Aussies can more reliably anticipate their energy costs.
For example, when you install a Plico solar + battery solution, not only do you pay a standard weekly fee, but you will capture and use your own solar energy. A solar battery is a key part of the mix - allowing you to use your stored solar energy when the sun isn’t shining (during nights and cloudy days) as well as during grid outages. What’s more, when you double down on solar and electrify everything in your home (moving away from gas) you empower yourself even further, using more solar energy and less (expensive) fossil fuels like gas.
Installing a solar + battery solution provides a buffer for your family against future energy price shocks.
Energy costs are on the rise but there are things you can do to minimise the effects on your household - including considering a Plico solar + battery solution. If you’d like to talk through your energy needs and wants, call one of the switched-on Plico team members on 1300 175 426, or check out our Solar Savings Calculator for an estimate of what you can expect to save.